Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
With the Federal Government moving into the fifth day of the shutdown, the major U.S. indexes are all heading south. As of 12:45 pm. EDT the Dow Jones Industrial Average (DJINDICES: ^DJI ) is off by 85 points, or 0.57%, while the S&P 500 is down 0.61% and the NASDAQ is lower by 0.65%.
With all the uncertainly pertaining to both the shutdown and the debt ceiling, investors are pushing stock prices lower, which could be a great thing for average investors who believe in long-term buys and picking hold stocks. The short-term jitters the markets are experiencing are certainly providing some great buying opportunities, as my colleague Dan Caplinger pointed out earlier today. But you also need to understand that a cheap opportunity doesn't always mean a great one. To help you illustrate that point, let's take a look at a few Dow components that are down today for a certain reason.
A few Dow Losers
Shares of Wal-Mart (NYSE: WMT ) are down 1.1% this afternoon after The Wall Street Journal published an article discussing Wal-Mart issues in India and the lack of progress being made when it comes to opening stores in the country. With India's population size and the vast majority of its citizens making low wages, investors have felt for years that the county would be a gold mine if Wal-Mart could crack the political road blocks. But that's not something that has happened yet, and based on the laws and political scene in the county, it could still be years down the road before progress is made.
Another big loser today is Boeing (NYSE: BA ) as shares are down 0.5%. Rival Airbus has received an order from one of Boeing's key customers, Japan Airlines, for $9 billion. In recent years, Boeing has controlled the Japanese markets, so the contract for Airbus is not only a lost opportunity but it shows that the competition is heating up in every market for the company and could possibly be an indication of what may be ahead for the firm.
Shares of IBM (NYSE: IBM ) are down 0.8% today after Barclays slapped the technology company with a lower stock rating. IBM was reduced from overweight to equal weight and had its price target cut from $215 per share to $190. The analyst gave reasons such as the impact of cloud computing, software-as-a-service (SaaS), and that investors will likely be focusing on cash-flow more than revenue until IBM gets its growth to a meaningful level. While the analyst may be right about the threat of cloud computing and SaaS, or even the prediction of what metric investors will use to evaluate the company -- of which I would have no idea how you figure that one out -- the analyst could also be dead wrong here. Individual investors need to understand that this is just the opinion of one analyst and that the company has yet to show meaningful signs it is losing to cloud computing or that SaaS is hurting its business model. And, most importantly, don't make a buy or sell decision based on one report or one analyst.
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